Dangers of Sweeping Health Reform

Massachusetts is boasting that it now has the lowest uninsured rate in the country. Many congressional lawmakers say this is proof that the massive health reform package the Bay State passed three years ago is working and that its main pillars should be replicated on a national scale.

Not so fast. The promises of reform are facing reality in the Bay State. Health costs are higher than ever, putting more financial pressures on taxpayers, citizens and businesses. Newly insured citizens are having trouble finding a physician who will see them, and emergency rooms in many hospitals are more crowded than ever.

Undaunted by these facts, Congress is writing health reform bills that contain many of the components of the Massachusetts health reform plan: a mandate requiring everyone to have health insurance; a requirement that businesses cover their workers or pay a fine; new regulations on private insurance benefits and pricing; expensive government-dictated coverage; and expansions in Medicaid and other public health programs.

While the state uninsured rate has dropped to 2.6 percent, most of the newly insured are in government-subsidized plans. In fact, about 70 percent of the people covered through Commonwealth Care, the government program that provides insurance to low- and moderate-income citizens, pay nothing for their coverage.

Total health insurance expenditures in Massachusetts are nearly a third higher than the national average. A typical family of four faces total annual health costs of nearly $16,900, versus the national average of $12,700.

One third of residents say that their health costs have gone up, not down, as a result of the 2006 reforms. And 70,000 people have been exempted from the individual mandate because insurance prices are too expensive for them to afford. Everyone else is subject to fines of $1,000 a year or more if they don't purchase health insurance.

The promise that getting everyone covered would force costs down is far from being realized. The state is relying heavily on federal funds to finance its reform initiative, but state spending still is projected to exceed original estimates by at least $75 million.

The state's soaring health costs are partly the result of intrusive government regulations in the insurance market and strict mandates on what services insurance policies must cover. Indeed, a recent study found that the state's most expensive insurance mandates cost patients more than $1 billion between July 2004 and July 2005.

Further, there is growing evidence that many people are gaming the system by enrolling in health insurance when they need surgery or other expensive medical care, then dropping it a few months later when they are well. This further drives up the price of health insurance for those who maintain their coverage throughout the year.

The Bay State is also suffering from what the Massachusetts Medical Society calls a "critical shortage" of primary care physicians.

As one would expect, expanded insurance has caused an increase in demand for medical services. But there hasn't been a corresponding increase in the number of doctors. As a result, many patients are insured in name only — that is, they have health coverage, but they can't find a doctor.

As Dr. Sandra Schneider, the vice president of the American College of Emergency Physicians, said: "Just because you have insurance doesn't mean there is a (primary care) physician who can see you."

Nearly half of internists in Massachusetts aren't accepting new patients. And the waiting time just to get an appointment is now up to 100 days in some areas.

The difficulties in getting primary care have led an increasing number of patients to rely on emergency rooms for basic medical services. Emergency room visits jumped 7 percent between 2005 and 2007. Over that same period, the costs of treating emergency room patients rose 17 percent, from $826 million to $973 million. Officials have determined that half of those visits didn't actually require immediate treatment and could have been dealt with at a doctor's office — if patients could have found one.

The Massachusetts experiment is proof that more government intervention is unlikely to lower medical costs and expand access to medical services. Instead of looking to Massachusetts as a model for reform, federal lawmakers should see the state's experience as offering strong evidence that more government intervention may very likely cause our health care system to get sicker.

Grace-Marie Turner is president of the Galen Institute, a nonprofit research organization focusing on patient-centered solutions to health reform. She can be reached at P.O. Box 320010, Alexandria, VA 22320 or at turner@galen.org.

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Massachusetts is boasting that it now has the lowest uninsured rate in the country. Many congressional lawmakers say this is proof that the massive health reform package the Bay State passed three years ago is working and that its main pillars should be replicated on a national scale.

Not so fast. The promises of reform are facing reality in the Bay State. Health costs are higher than ever, putting more financial pressures on taxpayers, citizens and businesses. Newly insured citizens are having trouble finding a physician who will see them, and emergency rooms in many hospitals are more crowded than ever.

Undaunted by these facts, Congress is writing health reform bills that contain many of the components of the Massachusetts health reform plan: a mandate requiring everyone to have health insurance; a requirement that businesses cover their workers or pay a fine; new regulations on private insurance benefits and pricing; expensive government-dictated coverage; and expansions in Medicaid and other public health programs.

While the state uninsured rate has dropped to 2.6 percent, most of the newly insured are in government-subsidized plans. In fact, about 70 percent of the people covered through Commonwealth Care, the government program that provides insurance to low- and moderate-income citizens, pay nothing for their coverage.

Total health insurance expenditures in Massachusetts are nearly a third higher than the national average. A typical family of four faces total annual health costs of nearly $16,900, versus the national average of $12,700.

One third of residents say that their health costs have gone up, not down, as a result of the 2006 reforms. And 70,000 people have been exempted from the individual mandate because insurance prices are too expensive for them to afford. Everyone else is subject to fines of $1,000 a year or more if they don't purchase health insurance.

The promise that getting everyone covered would force costs down is far from being realized. The state is relying heavily on federal funds to finance its reform initiative, but state spending still is projected to exceed original estimates by at least $75 million.

The state's soaring health costs are partly the result of intrusive government regulations in the insurance market and strict mandates on what services insurance policies must cover. Indeed, a recent study found that the state's most expensive insurance mandates cost patients more than $1 billion between July 2004 and July 2005.

Further, there is growing evidence that many people are gaming the system by enrolling in health insurance when they need surgery or other expensive medical care, then dropping it a few months later when they are well. This further drives up the price of health insurance for those who maintain their coverage throughout the year.

The Bay State is also suffering from what the Massachusetts Medical Society calls a "critical shortage" of primary care physicians.

As one would expect, expanded insurance has caused an increase in demand for medical services. But there hasn't been a corresponding increase in the number of doctors. As a result, many patients are insured in name only — that is, they have health coverage, but they can't find a doctor.

As Dr. Sandra Schneider, the vice president of the American College of Emergency Physicians, said: "Just because you have insurance doesn't mean there is a (primary care) physician who can see you."

Nearly half of internists in Massachusetts aren't accepting new patients. And the waiting time just to get an appointment is now up to 100 days in some areas.

The difficulties in getting primary care have led an increasing number of patients to rely on emergency rooms for basic medical services. Emergency room visits jumped 7 percent between 2005 and 2007. Over that same period, the costs of treating emergency room patients rose 17 percent, from $826 million to $973 million. Officials have determined that half of those visits didn't actually require immediate treatment and could have been dealt with at a doctor's office — if patients could have found one.

The Massachusetts experiment is proof that more government intervention is unlikely to lower medical costs and expand access to medical services. Instead of looking to Massachusetts as a model for reform, federal lawmakers should see the state's experience as offering strong evidence that more government intervention may very likely cause our health care system to get sicker.

Grace-Marie Turner is president of the Galen Institute, a nonprofit research organization focusing on patient-centered solutions to health reform. She can be reached at P.O. Box 320010, Alexandria, VA 22320 or at turner@galen.org.